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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division
UNITED STATES OF AMERICA
FILEDIN OPEN COURT
OCT 2 2 2015
CLERK, U.S. DISTRICT COURTNORFOLK VA
CRIMINAL NO. 2:15cr126
v.
LUMBER LIQUIDATORS, INC.,
Defendant.
STATEMENT OF FACTS
This Statement of Facts is part of the Plea Agreement between Lumber Liquidators, Inc.,
("LL") and the United States Attorney's Office for the Eastern District of Virginia and the
Environmental Crimes Section, Environment and Natural Resources Division of the United
States Department of Justice. The Statement sets forth the legal framework, environmental
context, and specific activities of LL, between October 2011 and September 2013 related to the
criminal charges to which LL has agreed to plead guilty.
I. BACKGROUND
A. Legal Framework
1. CustomsLaw: U.S. companies importing merchandise from foreign countries must
abide by all laws contained within Chapter27 of the U.S. Criminal Code (Customs
violations). The importer must file various documents, such as a U.S. Customs and
Border Protection (CBP) Form7501, describing the consignee, exporter,
merchandise, applicable duty and country of origin. When merchandise contains
timber products, the importermust also file a Plant and Plant ProductDeclaration,
which is described further in the nextparagraph. Under 18U.S.C. § 542,(Entry of
Goods by Means of False Statements), any company that makes a false statement on
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 1 of 18 PageID# 62
an import declaration, without reasonable causeto believe in the truth of that
statement, is guilty ofa felony violation.
2. The LacevAct: The Lacey Act, 16 U.S.C. § 3371 et seq., is one ofthe primary
federal statutesemployedto combatthe illicit traffickingofwildlifeand natural
products. Relevantto this case, the LaceyAct prohibits the importation of illegally-
harvested timber into the U.S. This prohibition helps to ensure, amongst other things,
that the U.S. timber industry is competing on a level playing field. It also reduces the
role ofthe U.S. as a driver of illegal timber harvest globally, such as in the Amazon
rainforest or, in this case, the habitat ofthe last remaining Siberian tigers. The Lacey
Act also requires importers of timber products to complete a Plant and Plant Product
Declaration, commonly referred to as a "PPQ-505" or a "Lacey Act Declaration," and
submit that declaration to the U.S. Department ofAgriculture's Animal and Plant
Health Inspection Service (USDA-APHIS). 16 U.S.C. § 3372(f)(1). This declaration
requires an accurate description of the timber product imported, including the
scientific genus and species, the total amount of timber product, and the country from
which the timber was harvested. The declaration is intended to promote the exercise
ofdue care in sourcing by importers, as well as provide data used by regulatory and
enforcement bodies to inform compliance efforts.
3. CITES: The U.S., along with 180other countries, is a party to the Convention on
International Trade in Endangered Species (CITES). CITES is a multilateral treaty
aimed at preventing the extinction of listed speciesofwild animalsand plants by
regulating the international trade in those listed species. There are three appendicesof
CITES-listed species. Relevant to this matter, Appendix III species are those that are
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 2 of 18 PageID# 63
listed after a member country petitions the other CITES parties for assistance in
controlling trade in the species.
B. Environmental Background
The Russian Federation's Far Eastern Federal District ("Far East Russia") is a remote
area ofRussia which sits between Siberia and the Pacific Ocean. Within Far East Russia is one
of the last remaining old-growth temperate rainforests, consisting of mixed broadleafand conifer
species, such as Mongolian oak (Quercus mongolica) and Korean pine (Pinuskoreansis).
Mongolian oak is the only oak that grows in Far East Russia. See Map of Russian Federation,
Appendix at 1.
The temperate forests of Far East Russia are home to the last remaining Siberian tigers
(Panthera tigris altaica) and Amur leopards (Panthera pardusorientalis). There are only an
estimated 450 Siberian tigers and 57 Amur leopards remaining in the wild. The primary
contributors to the cats' risk ofextinction are illegal logging and detrimental logging practices.
The risk stems from the fact that the cats are dependent on intact forests for hunting. In addition,
acoms and pine nuts are the primary food source for the cats' prey species, such as reddeer, roe
deer, and wild boar.
Extensive illegal logging in Far EastRussia has been reported by the Russian government
as wellas non-governmental organizations ("NGOs"). Much of this illegally-logged wood is
transported across Russia's eastern border into China where it is processed into such things as
flooring and furniture. The U.S. is a significant market forChinese-manufactured flooring and
furniture.
In response to illegal loggingand the decline in tiger populations, Korean pine was added
to CITES Appendix III in October 2010. InJune 2014, again in response to illegal logging and
the decline in tiger populations, Mongolian oak was added to CITES Appendix III.
3
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 3 of 18 PageID# 64
C. The Defendant
Lumber Liquidators Holdings, Inc. ("LL Holdings") is a publicly-traded company
incorporated under the laws of Delaware and headquartered in Toano, Virginia. LL Holdings is
a holding company which serves as the parent company over direct and indirect subsidiaries
which conduct its business. The defendant, Lumber Liquidators, Inc. ("LL Inc."), is a subsidiary
ofLL Holdings, and is the largest specialty retailer ofwood flooring in North America. LL Inc.
operates retail flooring stores and sells flooring products. Two ofthe wholly-owned subsidiaries
of LL Inc. are Lumber Liquidators Services, LLC ("LL Services") and LumberLiquidators
Leasing, LLC("LL Leasing"). LL Servicesprocures and imports flooring products, operates
warehouses, and transports product to LL Inc. facilities. LL Leasing contains the Lumber
Liquidators ChineseRepresentative Office ("RO"), which is located in Shanghai, China. The
RO is managed and directly controlled by LL Services, which operates the ROas a satellite
officeand pays LL Leasing for operation of the RO. For the purposesofthis Statement of Facts,
all parties and employees ofdirect and indirect subsidiaries of LL Inc. will be referred to
hereinafter as "LL"or "LLemployees"1
A significant aspect of LL's business is the importation of wood flooring from millsand
manufacturers located outside of the U.S. LL sells these products in retail stores that LL operates
throughout the U.S. At the times relevant to the offense conduct, the majority of LL's suppliers
were located in China, where the flooring was manufactured. The timber used in the
manufacturing, however, was often harvested in other countries and shipped to China. This
1For the purposes ofthe Plea Agreement, the defendant accepts responsibility for the actions ofthose subsidiariesand their employees that are described herein.
^]l^
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 4 of 18 PageID# 65
matter concerns timberoriginally harvested in Far EastRussia and Myanmar, shipped to China,
and then imported by LL in the form ofwood flooring.
II. OFFENSE CONDUCT
Theparties stipulate that the following facts are trueand correct. Theparties recognize
that the following facts do not represent the entirety of thegovernment's evidence against LL.
Had thematter proceeded to trial, the United States would have proven the following facts
beyond a reasonable doubt:
Atall times relevant to this matter, LLpurchased flooring that contained oak harvested in
Far EastRussia. CertainLL employeeswere aware that purchasing oak harvested in Far East
Russia posed a significant compliance risk. LL's internal guidance listed "Russian oak" in the
highest category ofproduct risk; certain LL employees possessed NGO and governmental
reports documenting illegal harvesting in Far East Russia; and an internal LL training from June
14,2013, described Far East Russiaas an area of high risk.
Despite LL's internal guidance and certain employees' knowledge of the risk associated
with Russian oak, LL increased its purchases of Russian oak until around the timeof the
government's execution ofsearch warrants at LL's Virginia offices on September 26,2013. See
Graph ofLL Purchases from Russia, Appx. at 1. In the first quarter of2011, LL imported two
purchase orders offlooring made ofRussian oak. By the third quarter of2013, LL was importing
nearly 60 purchase orders ofRussian oak.
A. Lumber Liquidators' Compliance Program
After the 2008 Lacey Amendments, LL engaged a third party to assist in developing a
compliance plan, which resulted in the 2010 Lumber Liquidators Lacey Act Compliance Manual
("2010 Manual"). LL setforth numerous guidelines in the 2010 Manual, which included the
following statements:
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 5 of 18 PageID# 66
1. The manual would be made available to all departments and employees whose jobfunction directly related to importation of wood products.
2. Employees were provided with specific websites to assist in determining the properspecies of wood being imported.
3. LL should be "confident" in their declarationofcountry of harvest on all Lacey ActDeclarations, at a minimum requiring government documents sanctioning harvest,transport, and export of the wood products.
4. Suppliers should supply all supplemental documentation showing country of harvest,legality ofharvest, and chain-of-custody prior to shipment of the wood product.
a. If a supplier did not provide the required supplemental documentation, thepurchase order should be rescinded;
b. If there was a "long-standing relationship" between LL and the supplier, therequired documentation could be provided after shipment;
c. LL would conduct periodic post-entry reviews and quarterly internal audits ofallimportpaperwork and supporting documentation to ensure that all imports werelegal and accuratelydeclared. Quarterly reportsof the audits were to be providedto management.
The 2010Manual was neitherwidelydistributed nor relied on. Some employees whose
direct duties included Lacey Act compliance were not aware of the 2010 Manual's existence.
On January 10,2012, LL Holdings produced a document entitled "Lacey Summary,"
which was intendedto provide Lacey Act compliance rules and regulations for relevant LL
employees, including employees and personnel in the recently-purchased China RO. The 2012
Lacey Summary included the following statements:
1. Every vendor andevery species should beevaluated forcompliance risk;2. LLshould re-source or discontinue working with vendors considered high risk;3. LL should discontinue any products considered high risk;4. All suppliers must provide documentation demonstrating legal harvest prior to
importation, including where applicable:
a. Certificates of legality;b. Certificates oforigin;c. Harvest documents; andd. Phytosanitary certificates;
5. Employees should be awareof "red flags" when dealing with suppliers, such as:
a. Suppliers who are reluctant to produce documentation of legal harvest;b. Incorrect, inconsistent, or imprecise paperwork or labeling; andc. An inability or unwillingness to answer questions about timber origin;
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 6 of 18 PageID# 67
6. "Blind reliance on a vendor who promises (even in writing) that the wood washarvested legally" was insufficient.
Though LL did set forth requirements, LL did not comply with these internal
requirements, employees did not take all of the actions required by the 2010 Manual and the
Lacey Summary, and there was inadequate enforcement of the various requirements outlined in
the2010 Manual and theLacey Summary.2
B. False Declaration of Harvest Country (Counts One and Two)
Beginning at some point prior to October 1,2011, and continuing through at least
February 2013, LL purchased finished solid oak flooring products from a Chinese business
entity, known herein as "Company X." Company X is a manufacturer of flooring products. Some
of the timber that Company X used to manufacture flooring was Mongolian oak from Far East
Russia.
LLwas required by law to submita LaceyAct Declaration for each imported shipment of
wood flooring from Company X. LL's regular practice wasto have Company X complete the
genus, species, country ofharvest, and other substantive contents of the declaration; LL or its
agentwouldthen sign and submit the declaration to USDA-APHIS upon import. Unless
otherwise specified, a shipment consisted ofa standard 40-foot intermodal shipping container,
which contains approximately 19,368 square feet (ft2)/32.4 cubic meters (m3) of solid oak
flooring.
2Lumber Liquidators, Inc. admits guilt for the offenses that are the subject of this criminal proceeding. It does notstipulate that it took any illegal conductwith a deliberate or willful intent to violatethe law. Deliberate or willfulintent isnot arequired element ofthecrimes charged inthis proceeding. Therequired intent for these crimes isreferencedin each chargerespectively.
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 7 of 18 PageID# 68
Between October 1,2011, and January 30,2012, LL purchased and imported 23
shipments of finished oak flooring from Company X. The accompanying Lacey Act Declarations
for those23 shipments, which form the basisof CountTwo, contained false statements regarding
the species and/or the country of harvest. These wood flooring shipments were sent from China
to Norfolk, Virginia. After the importations, LL subsequently shipped and transported these
wood products to LL warehouses, online retail customers and to LL's retail stores for sale in
Virginia and other states. The 23 shipments totaled 382,290.08 ft2 (614.73 m3) of solid oak
flooring, with an estimated retail value of$1,641,522.56, and resulted in an approximate profit to
LL of $673,024.25.
The associated Lacey Act Declarations, which LL submitted to USDA-APHIS, stated
that the flooring consisted of Mongolian oak harvested in Germany. In reality, Mongolian oak
does not occur in Germany, but is the only type ofoak harvested in Far East Russia. Information
regarding the distribution of Mongolian oak is readily available on numerous public websites,
including the websites provided in LL's 2010 Manual, which all showed that Mongolian oak
does not occur in Germany.
Despite LL's internal guidance, LL did not enforce its requirement that Company X
provide accurate documentation provingthe speciesof timber, location of harvest, legality of
harvest, or the chain-of-custody ofthe timberprior to LL's importation of the merchandise.
Upon receipt of the unsigned PPQ-505 declarations, LL did not review the declarations for
accuracy before submission. LL failed to exercise duecareand consequently transported timber
products that were in violation of the LaceyAct Declaration requirement.
Next, in February 2013, LL decided to transfer inventory from its Canadian warehouse to
a U.S. warehouse. Because theproducts would be imported into the U.S., LLwas required to
submit a Lacey ActDeclaration. In preparation, an LLemployee, whose duties included Lacey
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 8 of 18 PageID# 69
Actcompliance, noticed that the products included oakproducts from Company X that did not
have any supplemental documentation showing legal harvest, harvest location, or chain-of-
custody. Company X was not able to provide supplemental documentation, so the employee
reviewed documentation from previous Company X shipments. When reviewing the prior
documentation, the employee determined that the previous declarations contained false
statements because the declared species was Mongolian oak and the declared harvest country
was Germany; the employee was aware, however, that Mongolian oak was not found in
Germany. This same information was readily available in numerous public websites, including
the websites provided in LL's 2010 Manual.
On approximately February 23,2013, the employee sent an email to other employees
within the QualityAssurance department, the RO Manager, and a member of the LL legal
department. In the email, the employee noted that it was not possible that the previous
declarations for Company X's products were accurate regarding the purported harvest of
Mongolian oak from Germany.
Yet, between February 23,2013, and August 30,2013, LL purchased and imported 12
additional shipments ofoak flooring from Company X and an additionalChinese supplier, which
weredeclared as Mongolian oak harvested in Germany. The 12shipments, which form the basis
ofCount One, totaled 276,434 ft2 (385.48 m3) ofoak flooring, with an estimated retail value of
$969,175.99, and resulted in an approximate profit to LLof $397,362.16.
Despite the inaccurate information on previous declarations from Company X, and
despite internal guidance, LL did not adequately enforce itsrequirement thatCompany X
provide accurate supplemental documentation toverify the correctness of any declarations prior
to LL's importation of those products. After determining that previous information provided by
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 9 of 18 PageID# 70
Company Xwas false, LL did not have reasonable cause to believe in the truth ofany subsequent
declarations claimingthat Mongolian oak was harvested in Germany.
C. False Declaration of Species (Count Three)
LLincreased purchases of Russian oak flooring in 2012and 2013. The majority of these
purchases were from a China-based conglomerate that included another of LL's Chinese
suppliers, known herein as "Company Y." Company Y is a partof group of companies that
conduct a varietyof timber-related activities, including the millingand manufacture of timber
into flooring productsthat are then sold throughout the world. CompanyY's corporate affiliates
have operations in Northern China along the border with Russia, as well as in Far East Russia.
In May 2013, certain LL employees began cataloguing supplemental documentation
collected for products that LL was purchasing out ofChina. The documentation was received by
certain China RO personnel and entered into a spreadsheet ("tracking sheet") that was shared
with certain employees in the U.S. Between May 29,2013, and July 14,2013, LL purchased and
imported 35 shipments ofsolid oak flooring from Company Y, which form the basis ofCount
Three. These wood flooring shipments were sent from China to Norfolk, Virginia. After the
importations,LL subsequently shipped and transported these wood products to LL warehouse
facilities, to online retail customers and to LL's retail stores for sale in Virginia and other states.
The 35 shipments totaled 677,880 ft2 (1,134 m3) ofsolid oak flooring, with anestimated retail
value of$3,518,197.20, and resulted in an approximate profit to LL of$1,442,460.85.
Company Y provided LL with documentation showing a harvest concession within Far
East Russia (which provides the lessee the right to log certain species within defined areas),
chain-of-custody documents, and Russian phytosanitary certificates. The phytosanitary
certificates for these shipments declared thatthe wood was Mongolian oak, which is the only
species of oak that grows in Far East Russia. See Russian Phytosanitary Permit,Appx. at 2.
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 10 of 18 PageID# 71
Certain RO personnel in China received the documents and entered identifying information for
theharvest concession permit and phytosanitary permits into their tracking spreadsheet, which
was then shared with an employee in the U.S.
Contrary to the supplemental documentation, the Lacey ActDeclarations for each of the
35 shipments stated thatthe wood LL imported from Company Y was Quercuspetraea,
commonly called sessile oak, Welsh oak,or Irish oak. Welsh oak is considered a species that
presents a low risk of being illegally harvested because itsgrowing range is predominantly in
European countries without significant documented illegal logging. Welsh oakdoes notoccur in
Far East Russia. Informationshowing the range and distribution ofWelsh oak is widely available
on the internet, including the websitesprovided in LL's 2010 Manual.At least one LL employee
with Lacey Act responsibilities, prior to May29,2013, accessed websites which statedthat
Quercuspetraeaoccurred in Europe and not Far East Russia.
Despite internal guidelines and despite documents showing that the wood was harvested
in Far East Russia and therefore high risk, LL did not take the necessary measures, as outlined in
the 2010 Manual and the Lacey Summary, to ensure that declarations were truthful prior to
submission. Instead, LL increased purchases ofFar East Russian timber products from Company
Y in 2012 and 2013. Thus, LL failed to exercise due care and consequently transported timber
products that were in violation of the Lacey Act Declaration requirement.
D. Importation of Illegally Harvested Timber from Russia (Count Four)
Between May 29,2013, and September 23,2013, LL purchased and imported 79
shipments ofsolid oak flooring from Company Y, which form the basis of Count Four. LL
subsequently sold this wood flooring through LL's retail stores in Virginia and other states and
through direct online sales. The79 shipments totaled 2,559.6 m3 (1,530,072 ft2) of oakflooring,
with an estimated retail value of $7,845,008.40, and resulted in an approximate profit of
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 11 of 18 PageID# 72
$3,216,453.44. As described in the previous section, Company Y provided LL with a harvest
concession permit in FarEast Russia, chain-of-custody documents, and phytosanitary
certificates. All of the wood in these shipments was attributed to the same forest concession in
the Khabarovsky Province of FarEastRussia. The harvest concession permit stated that thetotal
amount ofMongolian oak which could beharvested from that concession was 373 m3.
When logging timber, however, not all of the allocated quantity will be "commercial"
grade; branches, crowns,and other parts of the tree are deemed"firewood" or "brushwood" and
cannot be used for flooring. Russian forestry experts estimate that, of the 373 m3, themaximum
amount of commercial timber would be approximately 300m3 -just over9 shipments of 40-foot
shipping containers filled with finished product.
The 79 shipments purchased and imported from Company Y, which were all represented
to have been harvested from the sameconcession, totaled 2,494.80 m3 (1,491,336 ft2), or about
800% ofthe allowable harvest under the concession permit. Certain personnel from the RO
noted the concessionpermit in their tracking sheet, and thus had access to information regarding
the permissible amount of timber that could be obtained from Company Y under the concession
permit. See Russian Harvest Concession Permit, Appx. at 3.
As early as March 4,2013, certain LL employees and personnel in China were advised to
beaware of overharvest due to recurring inaccuracies in documentation received from suppliers.
For example,a U.S. employee with Lacey Act responsibilitiesemailed certain RO and U.S.
employees, tellingthem that "the quantities ofwood materials being harvested...should make
sense and should be sufficient to cover the total quantity of products delivered to LL. If the
supplierprovides a harvestor transportpermit showing a quantity less than what was delivered
to LL, then there is likely a problem." Nevertheless, LL imported wood products from Company
Y that exceededthe quantity permitted under the harvest permit.
12 ?fc™S>/
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Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 12 of 18 PageID# 73
Despite internal guidance, and despite documentation showing that the wood was
harvested in Far East Russia and therefore high risk, LL did not take sufficient measures to
ensure that theshipments from Company Y did notexceed the amounts allowable under the
harvest permits. LLdid not heed the"red flags" described in the 2010Manual and the Lacey
Summary, such as inconsistent, incorrect, or imprecise paperwork. Thus, LL failed to exercise
due care and consequently imported timber products that were harvested and shipped in violation
of Russian law.
E. False Declaration of Harvest Country and Species (Count Five)
In September 2012, two LL employees, both with Lacey Act responsibilities, traveled to
China to visit suppliers. During that trip, they visited a wood products supplier in Shenzen,
known herein as "Company Z." The reference to "Company Z" incorporates a related Chinese
company that supplied LL and operated under the same Manufacturing Identification Code as its
affiliate; LL treated both suppliers as being the same entity. During the September 2012 trip, the
employees noticed that Company Z did not have any tagging or marking system, and did not
supplyany documentation showing harvest location. Upontheir return, one ofthe LL employees
wrotea reportof the findings and the potential implication on Lacey Act compliance, which was
provided to other employees.
Between September2012 and September 2013, LL attempted to procure supplemental
documentation showing legal harvest, harvest location, andchain-of-custody from Company Z,
but LL was often unable to do so. In May 2013, LL completed a survey to determine which
Chinese suppliers were able to provide appropriate supplemental documentation, and Company
Z was consistently unableto do so. Yet contraryto internal guidance,at no time prior to the
government's execution of searchwarrants on September 26,2013, did LL cease importing from
Company Z.
13 &>i
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 13 of 18 PageID# 74
Between July 1,2013, and September 10,2013, LL purchased and imported 6 shipments
ofwhat was declaredto be Indonesian big-leaf mahogany (Swieteniamacrophylla) from
Company Z,which form the basis of Count Five. These wood flooring shipments were sent from
Chinato Norfolk, Virginia. After the importations, LLsubsequently shipped and transported
thesewood products to LL warehouse facilities, to onlineretail customers and to LL's retail
stores for sale in Virginia and other states. The 6 shipments totaled 143,086.08 ft2 (238 m3) of
flooring, with an estimated retail valueof $790,402.10, and resulted in an approximate profit to
LL of $324,064.86.
LL consideredmahogany a high-risk species due to illegal logging and overharvesting,
and considered Indonesia a high-risk country due to reports ofwidespread illegal logging. Yet
LL had ordered big-leafmahoganyand specified that the mahoganyshould be of Indonesian
origin, as mahogany from South or Central Americais regulated by CITES.
After the six shipments were imported into the U.S., Company Z provided LL with
documentation showing that the timber products were not made with Indonesian mahogany, but
were insteadmerpauh (Swintoniafloribunda) from Myanmar.Company Z told certain LL
employees that, in an effort to meet LL's price points and shipping requirements, it had
substituted the Indonesian mahogany with merpauh from Myanmar. The documents
accompanying the shipments showed that the timber had been exported from Myanmar by the
Myanmar Timber Enterprise ("MTE"). At that time, U.S. companies were prohibited by the U.S.
Treasury Department from doing business with the MTE. Contrary to internal guidance, and
despite past problems with documentation, LL did not require Company Z to provide
documentation showing location of harvest, legality of harvest, or chain-of-custody prior to
importation. LL failed to exercise due care and consequently transported timber products that
were in violation of the Lacey Act Declaration requirement.
14
to*
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 14 of 18 PageID# 75
ON BEHALF OF THE UNITED STATES:
John C. CrudenAssistant Attorney General of the Environment
-*m\ NHliirat-ftasQiirces Division
Dana J. Boente
United States AttorneyEastern District of Virginia
atfjc^M. Duggan, Trial Attorney^Christopliei L. Hale, Tiial AttorneyEnvironmental Crimes SectionU.S. Departmentof Justice
ii<» UStephen^W. HaynieAssistant United States AttorneyEastern District of Virginia
Defendant's Signature: I hold the title ofChief Complianceand Legal Officer at the defendantcorporation, and I am theauthorized representative of the defendant corporation. I herebystipulate that the above Statement of Facts is true and accurate, and that if this case hadproceeded totrial, tbertJnited States would have proved the same beyond a reasonable doubt.
Date:Vc1-r.g"3V /t^^/CC&sfCt S>Jill Witter
Corporate Representative forLumber Liquidators, Inc.
Defense Counsel Signature: I am counsel for the defendant in this case. I have reviewed theaboveStatement of Facts with the defendant and his decision to stipulate to the accuracy of thesefacts is an informed and voluntary one.
DateftcrWPir £Patrick R. Hanes, Williams Mullen, PCCharles E. James, Jr., Williams Mullen, PCAndrew O. Mathews, Williams Mullen, PCBruce A. Baird, Covington & Burling, LLPCounsel for the Defendant
15
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 15 of 18 PageID# 76
APPENDIX
°y<
* /^t JukVvfiJia a^ /}&ffi$:Pp-$:$% Far Ea8t Russian V \•y T^OQsa fr^^^^^W FederalDistrlflKW^
j. -
vp/ijffcV• pftVw 1
s *r •
^SSlSWS^M'Jft^^ China ^L
V^i^^*^ Mongolia */•' /
\f '"
Map ofRussianFederation
LL Imports ofTimber Products Declared as Russian
70
60 y50 /N. /40 / ^S/^30 /20 /10
0
/Q2 2011 Q3 2011 Q4 2011 Ql 2012 Q2 2012 Q3 2012 Q4 2013 Ql 2013 Q2 2013 Q3 2013
Number ofLL purchase orders, by quarter, oftimber declared as having been harvestedin Russia.
^ St
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 16 of 18 PageID# 77
GSr?!
Russian Phytosanitarypermitprovided to LL showing the timber as Quercus mongolica (Mongolian oak).
c
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 17 of 18 PageID# 78
%<8
Pagesfrom the Russian harvest concession permit. The page on the left shows tracts which may be logged, while the page on the right showsthe total amount oftimber which can be logged (by species) during the period ofthe lease.
Case 2:15-cr-00126-RAJ-LRL Document 14 Filed 10/22/15 Page 18 of 18 PageID# 79